December 07, 2012

Wall Street analysts' reactions to American's new pilot contract

Here's a sampling of what Wall Street analysts are saying on Friday about the newly-ratified American Airlines pilots agreement.

J.P. Morgan analyst Jamie Baker: "We expect a positive market reaction, given our view that ratification helps ease the way towards a potential merger. Simply put, AMR needed a collective bargaining agreement to cement the economics of its stand-alone business plan. AMR creditors need a stand-alone business plan in order to consider the merits of a potential merger. A failure to ratify would have essentially stopped the clock, in our view, further dragging out an already complex process."

Maxim Group analyst Ray Neidl: "Whichever direction the situation develops in now having a pilots contract gives the unsecured creditors the opportunity to value the future prospects of the company both as a stand-alone entity or in a merger with U.S. Airways. We expect to see rapid movement going forward and as chances improve for a merger U.S. Airway’s stock price to strengthen and unsecured claims at American to strengthen in price."

Gimme Credit high-yield bond analyst Vicki Bryan: "We think this suggests more that the pilots are agreeing with the rest of AMR's unions to finally move past long entrenched turmoil with the company versus any spirit of camaraderie or newborn confidence in management's strategic direction. The pilots and indeed all AMR's major unions still firmly support the sale of the airline to US Airways and already have agreed to tentative contract terms with that carrier."

Comments

...and between JP Morgan and AA management, you have failed to receive the refund of your hard earned money you set aside with these folks for retirement medical. Once the fund was terminated back in September, the refunds should have been returned. As a thirty year AA employee, I have seen numerous occasions where AA had a chance to show some goodwill. Merry Christmas Mr. Horton, Mr. Weel and Mr. Hicks etc...